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Late last year I was approached by a friend who works at the head office of one of the largest record companies in the world. They told me that it looked like there was a position in the Intellectual Property/Legal team and that I should apply for it. They told me that the Label wanted someone who was aware of the problems that the company was facing and had some “fresh ideas”. I took this to mean that they wanted someone who might have a solution to the overall decline of sales of recorded music, which had effected not just this particular label, but the entire music industry for over a decade.

Well it just so happened that I had dedicated a lot of brain hours to dissecting the problem of declining music sales since the advent of the Mp3, and I may have a solution to the problem.

I spent quite some time putting together my job application, fantasizing about meeting with the execs, telling them they had to hire me before I give them my idea, and then (having got the job) successfully enacting my plan.

Whether my idea could have solved the problem became moot when I didn’t even get an interview. In digesting my disappointment it dawned on me that, maybe the Label wasn’t looking for a workable solution to mitigate or reverse the issue that had been slowly eating away at it for so long. Maybe they wanted someone with “fresh ideas” that might advance their current agenda.

So what was my idea? Not rocket science; I won’t even presume that it was original; But I’m sure that if it was done right it would have helped. It was basically this:

If the record labels really wanted to stem the problem of illegal internet downloading of copyrighted music and film they would need to change the way they have been behaving toward the massive number of people that have been downloading music, without paying the Labels for it. Instead of trying to beat music listeners into submission through draconian legal proceedings, why not try educating them about why dowloading music without paying the copyright holder for it was wrong. Why not try having a large scale public discussion about it? Instead of defining the Label’s relationship with the public as that of adversaries, why not show the public how their interests are aligned, and best served by having copyrighted material bought and paid for. The issue may have been touched on in the media here and there, but I don’t think it can be said that an open public discussion on the issue has ever happened.

It is now 12 years since Lars Ulrich et al sued Napster, and major labels have attempted countless times to sue individuals (successful or otherwise). Yet illegal internet downloading is more prevalent today than it has ever been; aided by improving technology, faster broadband and countless ways to share files without shedding a cent.

It would appear that suing music consumers hasn’t worked……yet.

Instead of quitting a failed strategy when it was obviously not working, the Labels have instead chosen to intensify their efforts. If the Labels hadn’t been taking the scalps they wanted through legal action, it appears obvious that the problem remained a legal one, i.e. the law wasn’t good enough to protect their rights.

The labels were faced with this: First of all it’s costly constantly suing private individuals (corporate or natural) on your own dime. Second of all if theft is a crime punishable by the state, why shouldn’t the state be prosecuting private individuals for copyright infringement? Thirdly, maybe there is some other way of making someone else uphold the Label’s property rights?

The answer to the first is provided by the second. This is what happened in the USA where the SOPA and PIPA legislation has been introduced. It is also the technique used in the current Megaupload debacle, whereby the FBI (and for some reason the NZ Police) have been acting as mercenaries for a conglomerate of major labels and studios.

The answer to the third is what has been provided for in New Zealand under the so called 3 Strikes legislation, whereby it now falls upon internet service providers to police the usage of its customers.

Now, there is a ginormous stratagem that is being played out at the moment, in which the end of internet piracy is but a McGuffin. It has been years in the making, and the crescendo of its gathering momentum is building steam.

If the issue at the heart internet based copyright piracy was the fact that most people did it because it doesn’t feel wrong, wouldn’t the obvious solution be to make it feel wrong? If there are 100 children at a playcentre, and each of them steals lollies from the teachers jar, how many children learn not to steal from the jar if the teacher only takes one aside and tells them off? What is the child being disciplined likely to say? “Everyone was doing it. It didn’t feel wrong.”

A lot has been said over the years about the inability of the law to deal with copyright infringement over the internet; That technology moved faster than the law could keep up with – but most of it has been untrue. Copyright law has always allowed civil claims for infringement, and has also been a crime if the unauthorized activity was on a large enough scale.

What changed was the effectiveness of the legal system to solve what was essentially a problem of cultural values presented by the new technology. There are even hints at the where the crack in the dyke started in the offence provisions of the NZ Copyright Act (see 131 (6)).

You see where copyright as property differs from physical property is that the crime of stealing physical property stems from the exclusive nature of holding that property: e.g, if you steal my book, you have excluded me from having the use of that book. Whereas if you copy an Mp3 of my music from my computer, I still have the use of the original file. It may also be difficult to determine whether my Mp3 has been copied at all, let alone whether you unlawfully duplicated it.

The other factor to bear in mind with copyright is that copyright holders tend to only care about it insofar as it makes them money. It is the money that they make from the copyrighted material that is of central importance, not the intrinsic value of the idea or expression contained in the material itself. Copyright was only invented as a way for artists to make money from their ideas. The delegation of those rights to third parties was inevitable once they became a tradeable commodity.

There is another reason why it is difficult to prosecute casual downloaders and that has to do with how proportional any punishment will be to the crime committed. The cost of copyright infringement is notoriously hard to pin down because like any saleable commodity, its cost is dependent on market forces. If people suddenly value copyright so little as to not be prepared to pay for it at all, how can the copyright holder fairly say that a song was stolen if the lions share of the market are taking it for free?

One of the basic tenets of criminal justice is that the punishment should be exactly proportional to the crime. The problem with proportionality is that the scale of the crime tends to shrink if its taboo nature is lost, and the crime essentially becomes socially acceptable. This usually ends up either with a law change (e.g homosexuality or prostitution law reform), or the law remaining in force but never being used (e.g. the crime of blasphemy).

Currently the criminal offence of copyright theft (bar a few exceptions) is mostly limited to infringing copyright for business purposes, and it is here where the main battle has been fought. This is because if someone sells copyrighted material without permission and does not pass on any of the proceeds from that sale to the copyright holder, they have in fact stolen the only thing that matters to the copyright holder: Money.

If we look at the Megaupload case, the FBI has accused the site owners of a “MEGA CONSPIRACY” involving copyright theft, racketeering and money laundering. I have had a quick glance at the Indictment, and the Racketeering and Money Laundering charges all hinge on whether the copyright theft is proved. The Indictment makes the crimes that the Mega Conspiracy have been accused of sound grandiose, designed by a criminal mastermind of Blofeldian proportions; but in truth they are essentially accused of using a standard Premium Subscription business model to steal copyright on a massive scale for profit. In my opinion the FBI should really struggle to make the charges stick because Megaupload does not provide any content to its users itself. Kim Dotcom himself likens the websites service to that of an external hard drive. All of the sites content is supplied by its users. Yet you don’t see the FBI rounding up the CEO and Directors of Western Digital, Maxtor or Seagate. I’m not the only one who is of this view. There’s also an interesting discussion on it here.

There is another far more disturbing facet to this case and it is just how far the arm of US law enforcement has been able to effortlessly reach. Dotcom and his compatriots were rounded up in New Zealand on the issue of the indictment with apparently no procedural hold-up, in an exercise that was so well planned and carried out – it eerily mirrored the Birthday Party drug bust in the Johnny Depp film Blow.

One could have expected there to be some form of delay between the issuing of the Indictment on 5 January to the date of the bust in NZ; but it only took two weeks, and was carried perfectly to plan to coincide with Dotcom’s birhday party. It seems somewhat unnerving to know that the NZ Police had been working with the FBI on planning the raid since August.

I think everyone one should be worried that somehow a German national who is a New Zealand resident can somehow find themselves facing extradition to America to face trial. America’s status as world police no longer operates only on a military level, but effectively on any level it wants. The Megaupload story seems a lot like this story from a few years ago turned up loud.

Don’t for a moment think that because our own cyber-Megacriminal didn’t get extradited that it won’t happen to a NZ resident or citizen in the future. This guy has been fighting extradition from his home country for 7 years. Seeing how chummy our governemt and its subsidiary bodies are with US law enforcement, it seems only a matter of time before NZ citizens can look forward to a trip to the states to face charges.

People should be really pissed off that the sovereignty of their own nation’s justice system has been hi-jacked by an international cartel of companies via a foreign law enforcement agency. The “F” in FBI stands for federal – as in the federal union of the united states – not “I” as in international.

I have so far focused on some of the detail which has gone missing or unconnected by the media in evaluating the area of internet piracy and cyber-crime, but the big question – and the most important question – still remains unaddressed: Whos is behind the push and why?

On the face of it, it would seem obvious that the the record labels and music studios are behind it, but if you were to follow the money, or more particularly the labels’ lack of it, and their stark defiance of following basic logic in solving the problem of internet piracy by treating the symptom but not the cause; I think you would find that there are probably other forces at play behind labels themselves.

If record labels are bleeding money in lost sales; If record labels are spending tens of millions of dollars in mixed result law suits; If record labels are going out of business, or being bought out by other companies in droves – how can they afford to continue with a failed strategy to stem internet piracy? And how do they think it will improve sales when their PR has been about as bad as it can possibly be? And where are they even going to get their reserves of copyrighted ideas to keep selling into the future if they don’t sign new acts, but insist on selling re-issues of old artists and acts?

So yes, how awfully naive of me to offer my services to solve a problem that never was.